China hits back in US tyre import dispute

BEIJING, Sept 13, 2009 (AFP) - China said Sunday it was probing possible unfair trade practices involving imports of US car products and chicken meat, firing back after Washington slapped tariffs on Chinese tyre imports.

"In line with national laws and World Trade Organisation rules, the commerce ministry has started an anti-dumping and anti-subsidy examination of some imported US car products and chicken meat," the ministry said on its website.

The action came a day after China expressed anger over a decision by US President Barack Obama's administration on Friday to slap steep tariffs on imported Chinese tyres.

China called that move "protectionist" and had threatened retaliation in its first trade spat with the Obama administration.

"Recently, the commerce ministry has received word from domestic industries indicating that the above mentioned products had entered our nation's markets via dumping, subsidies and other unfair trade means," the statement said.

"This impacted domestic industries and the commerce ministry was requested to launch an anti-dumping and anti-subsidy probe."

It gave no further details on the exact products involved or the alleged trade violations.

The White House had announced punitive duties of an additional 35 percent on Chinese-made tyres just weeks before Obama is due to host his Chinese counterpart Hu Jintao at the G20 summit later this month.

Obama approved an increased duty to all imports of passenger vehicle and light truck tyres from China for a period of three years, the White House said in a statement on Friday.

The decision was taken "in order to remedy a market disruption caused by a surge in tyre imports," the statement said.

But the move triggered an angry response by China on Saturday.

"China is firmly opposed to this measure of serious commercial protectionism by the United States," commerce ministry spokesman Yao Jian had said in statements posted on the ministry's website.

He said the US move "not only violates world trade rules but also the undertakings given by the US at the G20."

Obama had been under pressure domestically to curb rocketing imports of Chinese goods that critics suggest have cost more than 5,000 jobs in the United States.

The government-run US International Trade Commission (USITC) had urged duties of up to 55 percent after union leaders claimed imports of cheap Chinese tyres had tripled over the last five years.

However, to minimise Chinese anger, Obama opted for a lower figure, whereby tariffs -- already at four percent -- will soar by an additional 35 percent in the first year, 30 percent in the second and 25 percent in the third.

China was already angered earlier in the week when the US imposed tariffs on pipes used in the petroleum industry.

The United States has long grappled with a ballooning trade deficit with China amid allegations that Beijing has been manipulating its currency to make its exports more competitive.

Obama entered the White House in January after campaigning for a robust trade policy with China.

Source: AFP

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